Google wants utility companies to sell it more green power for data centers

In a company blog post published on Friday, Google argued that as it expands data centers—most notably in North Carolina—it needs “utilities to offer a renewable power option for companies that request it—something that’s not currently offered by most utilities.”

In a five-page white paper also published Friday, the search giant called for a “renewable energy tariff,” also known as a rate schedule, for different types of users: commercial, residential, and industrial. However, adding a new type of tariff requires regulatory approval, too.

“Utilities would offer companies like Google the choice to buy renewable energy through a new class of service,” the white paper (PDF) states. “The service would be voluntary, provided only to those companies that request it but open to all customers that want it and meet basic criteria.”

In short, as GigaOm summarizes: “Basically, the customer using the power—in this case Google—would pay for the additional cost of clean power, instead of the rate-payers—basic residential and commercial customers—which is how it operates in many states."

Would this be a separate grid that provides only clean energy, or would this just be paying a little extra to claim they have green centers like Apple?

Almost certainly the latter; building a parallel grid would be staggeringly expensive and for load balancing reasons a pure wind/solar one wouldn't work unless google was willing to shut its data centers down on calm nights.

Would this be a separate grid that provides only clean energy, or would this just be paying a little extra to claim they have green centers like Apple?

Why would building it on a different grid make any difference? Are you looking for some sort of homeopathic electricity, that retains a memory of how it was generated?

Google is building their own power sources, as are other companies that don't have tech fanboys. (Anyone who assumes green power somehow started with apple, or even green power in the tech sector, is certainly a fanboy)

On the balance, having an option to invest in green power anywhere may have a bigger impact on the energy market than a few isolated pilot power programs.

They are trying to boost the green energy industry by making it possible for companies to advertise that they're using green energy. As more companies do it (and pay in for it) there will be more pressure on others to do the same.

Google could build their own green power plants, but they'll actually make a bigger impact through this route by enabling others.

All they need to do is HIRE people to design the plant and others to build it.

/face-palm

If only they had some kind of technology, that would let them access a global electronic network of information, where some part of this strange and wild network had been optimized to sort people who could offer certain skills or services to other people for set exchanges of some kind of predetermined unit of exchange with an agreed upon value.

It is all very complicated. Some states have crazy laws in place to protect their utilities, for instance in missouri we can get solar panels installed, and they can be supported by the manufacturer, but the installer can not provide a service level agreement with us as it would violate the non-compete clauses with Ameren UE. If our installer provides a service level agreement they would become a electric service provider and that would be illegal.

All they need to do is HIRE people to design the plant and others to build it.

/face-palm

If only they had some kind of technology, that would let them access a global electronic network of information, where some part of this strange and wild network had been optimized to sort people who could offer certain skills or services to other people for set exchanges of some kind of predetermined unit of exchange with an agreed upon value.

We have two rate schedules, residential and non-residential. The non-residential rates are broken down further into kW demand quotas. The more you promise to use, the cheaper your rate, with penalties for not meeting your end of the bargain. Also, construction to new business is "subsidized" by a portion (85%) of the projected first year's revenue. We have a model we plug figures into that calculates usage. It's a sophisticated system, but we also have other metrics: If you're building a McDonalds, and say you're going to be pulling 225 kW of demand, we can easily run comparisons on umpteen McDonalds services and diversify your demand figure down to 150.

As far as renewable goes in this location, our company does not offer any type of renewable generation for individual customers. Instead, the burden is on the customer to provide and install that if they wish. We do have a provision for "net metering" which allows for two-way transferrence of power. If your installed renewable generation offsets your usage, you get a credit. With most renewable like solar and wind, the generation is not sufficient to totally run the business, so these customers just pay the "net". If we offered renewable it would still need to be backed with permanent coal generated power because we wouldn't be able to guarantee the uptime. That's why the burden is on the customer.

Google doesn't need to "build a renewable generation plant". They just need to contract a renewable resource company to install the necessary materials.

We have two rate schedules, residential and non-residential. The non-residential rates are broken down further into kW demand quotas. The more you promise to use, the cheaper your rate, with penalties for not meeting your end of the bargain. Also, construction to new business is "subsidized" by a portion (85%) of the projected first year's revenue. We have a model we plug figures into that calculates usage. It's a sophisticated system, but we also have other metrics: If you're building a McDonalds, and say you're going to be pulling 225 kW of demand, we can easily run comparisons on umpteen McDonalds services and diversify your demand figure down to 150.

As far as renewable goes in this location, our company does not offer any type of renewable generation for individual customers. Instead, the burden is on the customer to provide and install that if they wish. We do have a provision for "net metering" which allows for two-way transferrence of power. If your installed renewable generation offsets your usage, you get a credit. With most renewable like solar and wind, the generation is not sufficient to totally run the business, so these customers just pay the "net". If we offered renewable it would still need to be backed with permanent coal generated power because we wouldn't be able to guarantee the uptime. That's why the burden is on the customer.

Google doesn't need to "build a renewable generation plant". They just need to contract a renewable resource company to install the necessary materials.

I think this is missing the problem they're trying to address, but these things vary massively by state, so it may just not apply to you (it also sounds like you guys generate all your own electricity, except for small-scale grid ties, as opposed to some utilities here who source their electricity from many other companies doing the generation).

The problem in some states is that you have weird government-induced incentives to bring in renewable power, but everyone gets a bum deal on it except the company providing the power, and consumers pay for it every month. My understanding of Google's proposal is that it will be one avenue for renewable energy to continue to be brought onto the grid without the machinations that end up with higher prices for everyone, instead letting customers that want pay for it (and can more-or-less guarantee that they're going to be around to continue to pay for it) directly pay for it.

Many renewable energy companies get huge tax breaks and government-guaranteed low interest rates on loans to build renewable electricity generation, which is good in theory (incentivizing the market to provide these things), but then there are state laws that state that power utilities must provide a certain percentage of their power from renewable sources. This essentially forces the utilities to sign multi-decade deals with the generation companies, meaning the already low-interest loan is now guaranteed to be repaid and profit will be made, but they do so at prices that raise utility bills for *all* customers, including regular household consumers. While the tradeoff is that we get more environmentally-friendly energy generation, the system is heavily slanted in the direction of investors, with no real market forces to make them keep their prices down...they've already locked in a high price for the next 20 years because the utility has no one else to buy from to comply with state law.

To get back to this proposal: this is one way thata) renewable energy can increasingly be usedb) it can still count as a percentage of renewable sources used on through a utilityc) the company using the electricity can still broadcast the marketing message of using all "green" power (and, for the less cynical, satisfy their own moral system by using renewable energy) andd) higher prices won't be forced on consumers already hurting in this economy.

I haven't read the white paper, but preferably there would also be market pressure that could be brought to bear by such a large consumer over the producer of the energy to keep prices lower, to ensure that the environmentally-friendly method of generating power is actually environmentally friendly, etc.

In Ontario we have a system where generation, transmission, and distribution are handled by different companies (or groups of companies) you can elect to pay a premium on your electricity to have the portion of your bill that ends up with the generator go to a specific company. So I can sign up with a green energy generator and know that they are being paid to provide the amount of power I use. It cuts out the transmission and distribution companies and lets me back a specific source if I'm willing to pay for it. Seems like this might work elsewhere.

Would this be a separate grid that provides only clean energy, or would this just be paying a little extra to claim they have green centers like Apple?

Why would building it on a different grid make any difference? Are you looking for some sort of homeopathic electricity, that retains a memory of how it was generated?

Google is building their own power sources, as are other companies that don't have tech fanboys. (Anyone who assumes green power somehow started with apple, or even green power in the tech sector, is certainly a fanboy)

On the balance, having an option to invest in green power anywhere may have a bigger impact on the energy market than a few isolated pilot power programs.

EDIT: urlfix

The ultimate goal of this - I imagine - is to promote the usage of green energy via net supply. If a current power company agrees to power google and others via green energy(which is indistinguishable from non-green on the grid). They must be able to show sufficient generation.

If you're contracted to supply 30MWhrs of green energy but only produce 15 MWhrs then there's a problem. If enough people took Google's route, power companies would be forced to expand their renewable production.

Some people are really good at building search engines. Some are really good at building renewable power plants. Google might just not want to get into the power game.

For one, Google invests in all sorts of things of this nature anyways (Just look at the stuff Google.org invests in).

Secondly, there is a thing called contracting. Google would not have to build, operate, or maintain anything. They would only need to provide capital, and assume the risks associated with being owners.

This is still a good move by Google, because it might pressure utilities (and more importantly, the state legislatures who want to court Google jobs) to push for more renewables. That being said, there is no reason Google couldn't do the renewable stuff on their own.

In Sweden we also have something like this. They de-regulated the energy market here in 96 and since then you can choose any power delivery company and practically all of them (there are hundreds) have "green" options. It's not even always more expensive, although that depends on what type of deal you have, for how long and so forth.

It's not all good though. The de-regulation was supposed to bring more competition and, in effect, lower prices but what happened was pretty much the exact opposite. The first few years the power companys raised the rates while at the same time they made huge cutbacks on maintanance and now we all pay. Pretty much the exact same thing happened again a few years later when the politicians decided to de-regulate the train-traffic. The markets are divided in to such small pieces that no one has any real responsibility, there's always some other company to blame when something breaks or doesn't work.

I'm reading this discussion and trying to understand why any mention of Apple's efforts to get their data centers on renewable power is being downvoted to negative territory.

I'm just guessing here, but this is an article about Google, not Apple. Some people get upset when Apple fans enter every discussion with "Apple already does that and they do it better." Even when it is true it can come across as an obnoxious thing to say.

I'm reading this discussion and trying to understand why any mention of Apple's efforts to get their data centers on renewable power is being downvoted to negative territory.

I would surmise that it is because those posting about how Apple does it with their own green power centers is not actually aiding the discussion any as the article mentioned that Google was calling on the power companies to offer this option to everyone--industrial, commercial, and residential alike. Apple's solution does not benefit anyone outside of Apple, and thus not really applicable to the discussion.

Adding in non-pertinent topics like that comes off as fanboy-ish and not really informed on the topic at hand. This is just my interpretation.

I'm reading this discussion and trying to understand why any mention of Apple's efforts to get their data centers on renewable power is being downvoted to negative territory.

I would surmise that it is because those posting about how Apple does it with their own green power centers is not actually aiding the discussion any as the article mentioned that Google was calling on the power companies to offer this option to everyone--industrial, commercial, and residential alike. Apple's solution does not benefit anyone outside of Apple, and thus not really applicable to the discussion.

Adding in non-pertinent topics like that comes off as fanboy-ish and not really informed on the topic at hand. This is just my interpretation.

It's funny.. I posted the comment about Apple, and while I'd prefer not to be called a fanboy at all, I'm probably bigger fanboy of Google than Apple.

My question was serious. I assume Apple analyized it and found it was cheaper in the long run to build thier own green power generation. Maybe I'm wrong and building thier own was more about PR, but I doubt that based on the lack of marketing or promotion around thier data centers. I've seen this (cheaper self-owned generation) happen on a small scale with on-site cogen facilities producing power cheaper than the grid (resorts in this case) and am just assuming it could be true on a large scale as well.

Google has dabbled a lot in green power over the years from cars to wind. I'm shocked that asking the ars community to comment on why Apple might choose one direction (build thier own) and Google might choose another (lean on power companies) comes off as supporting either company blindly... Not my intention at all.

Would this be a separate grid that provides only clean energy, or would this just be paying a little extra to claim they have green centers like Apple?

Why would building it on a different grid make any difference? Are you looking for some sort of homeopathic electricity, that retains a memory of how it was generated?

I guess you managed to run into my point despite trying to be a trollish bag. If a power company already has some amount of clean energy sources, how is this different from Google paying a fee to claim they are using clean energy when nothing has changed?

Even if Google gets charged a separate tariff for the unreliably-generated energy that they use, it will still drive up everyone's rate at that utility.

Adding a large user increases the base load demand. If the base load demand is met with efficient gas generation, nuclear generation or coal generation (assuming hydro is not available) then the cost for the overall consumer stays about the same, assuming that electricity rates are pretty close to cost plus on the base-load generation rate.

However, when a substantial amount of unreliable generation is introduced, such as wind or solar, as proposed in this case, now you have wind and solar trying to substitute for base-load supply. But wind and solar are unreliable and must be backed up with a spinning (always on) reserve from an inefficient gas turbine (different from efficient base-load gas). Furthermore, this unpredictable back-up for the unreliable wind and solar is purchased on the "spot" electricity market at much higher rates than base-load power. Often at rates as much as ten times the regular rate. Keep in mind that even though these "spot" generators don't sell power all the time, they still have year-round expenses.

So far so good. But the power purchased on the spot market to make up for the wind and solar being unreliable are neither wind nor solar. On the books they just look like a larger than normal spot electricity purchase. So they get billed to the entire customer base, thus driving up everyone's price, because now everyone is paying for a larger percentage of spot electricity purchases, than they would be if the utility had simply added or contracted for more baseload power.

Hence, even though it looks like the wind consumer is paying the additional cost of their unreliable power, all the consumers end up paying higher rates, to compensate for the unreliable nature of the green-washed generation.

Additionally, several careful, peer reviewed studies have shown that the need for less efficient spinning back-up gas turbines means that using unreliables yields either a zero or a tiny reduction in CO2 emissions.

In other words, wind and solar are just more expensive ways of burning natural gas.

Even if Google gets charged a separate tariff for the unreliably-generated energy that they use, it will still drive up everyone's rate at that utility.

You seem to be approaching this from the perspective that it is a completely new concept.

It's not a new concept at all.

I pay my retail power provider extra to buy an equivalent kWh worth of electricity from GreenPower accredited renewable sources. It's all averaged out over the quarter (or, more likely, 2 year contract period). On the retail market a kWh is a kWh.

The situation you describe may make sense if everybody bought 100% GreenPower all at once, tomorrow, but that's not how this model works. This model works by providing an incentive for renewable suppliers to invest in generating more electricity, as more people adopt GreenPower, and by gradually reducing demand on non-renewable generators. Economies of scale then allow renewable generation to become more efficient and build more capacity.

Of course, different markets have different requirements. In Australia our peak electricity demand is during the hottest days, something home solar installations is already fixing. In fact, solar is so cheap now that not a single extra coal fired power station will be built. We don't have the long, deep winters that require heavy baseload generation.

Even if Google gets charged a separate tariff for the unreliably-generated energy that they use, it will still drive up everyone's rate at that utility.

You seem to be approaching this from the perspective that it is a completely new concept.

It's not a new concept at all.

No, I am not. The city of Austin has done this exact thing for quite a while. Their regular customers didn't complain at first, because it looked like the green subscribers would pay all the extra costs.

My point, which you have completely missed, is that there are additional costs, brought on by the lack of reliability in wind and solar which add additional costs. However, those costs are not charged to the "green" subscriber. They are charged to every one of the utility's customers.

IN other words, it is a con job and fraud, to say that the Green subscriber is paying all of the cost.

One need only look at Austin's recent huge increase in electricity rates, during a period of historically low natural gas prices, to understand the true cost to every consumer of so-called "green" energy. What it really is is unreliable, expensive energy, which does not reduce CO2 emissions in any way.

Quote:

I pay my retail power provider extra to buy an equivalent kWh worth of electricity from GreenPower accredited renewable sources. It's all averaged out over the quarter (or, more likely, 2 year contract period). On the retail market a kWh is a kWh.

The situation you describe may make sense if everybody bought 100% GreenPower all at once, tomorrow, but that's not how this model works. This model works by providing an incentive for renewable suppliers to invest in generating more electricity, as more people adopt GreenPower, and by gradually reducing demand on non-renewable generators. Economies of scale then allow renewable generation to become more efficient and build more capacity.

No, the situation I describe is exactly what is happening now in the real world. Your utility only pays the unreliable sources for the power they provide. Which you then pay for. But to supply you with reliable electricity, your utility must then purchase more expensive electricity on the spot market, to fill in when the unreliable electricity is not available. The additional cost of the spot market purchase is then spread amongst everyone, not just you, because it is not a purchase of unreliables -- it comes from a quick spin-up gas generator.

Quote:

Of course, different markets have different requirements. In Australia our peak electricity demand is during the hottest days, something home solar installations is already fixing. In fact, solar is so cheap now that not a single extra coal fired power station will be built. We don't have the long, deep winters that require heavy baseload generation.

You should try reading some facts. Try http://www.bravenewclimate.com and dig into the older articles. The peak generation of solar does not match the peak consumption of cooling. You will need more coal for cooling, if you do not build nuclear base load.